Correlation Between JD Sports and Jutal Offshore

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Can any of the company-specific risk be diversified away by investing in both JD Sports and Jutal Offshore at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JD Sports and Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Jutal Offshore Oil, you can compare the effects of market volatilities on JD Sports and Jutal Offshore and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JD Sports with a short position of Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Jutal Offshore.

Diversification Opportunities for JD Sports and Jutal Offshore

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between JDSPY and Jutal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and JD Sports is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JD Sports Fashion are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of JD Sports i.e., JD Sports and Jutal Offshore go up and down completely randomly.

Pair Corralation between JD Sports and Jutal Offshore

Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Jutal Offshore. In addition to that, JD Sports is 113.29 times more volatile than Jutal Offshore Oil. It trades about -0.16 of its total potential returns per unit of risk. Jutal Offshore Oil is currently generating about -0.15 per unit of volatility. If you would invest  1,910  in Jutal Offshore Oil on September 17, 2024 and sell it today you would lose (5.00) from holding Jutal Offshore Oil or give up 0.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

JD Sports Fashion  vs.  Jutal Offshore Oil

 Performance 
       Timeline  
JD Sports Fashion 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days JD Sports Fashion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Jutal Offshore Oil 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Jutal Offshore is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

JD Sports and Jutal Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JD Sports and Jutal Offshore

The main advantage of trading using opposite JD Sports and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports position performs unexpectedly, Jutal Offshore can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.
The idea behind JD Sports Fashion and Jutal Offshore Oil pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.

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